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Thursday, 30 April 2009 14:07

Mobile industry keeps moving, despite downturn

Mobile operators are seemingly making a good fist of business and showing their resilience in the face of the economic downturn, with operators maintaining revenue and customer growth slowing but still continuing.

A report from analysts, Ovum, released today says that mobile operators around the world are not only steadily beating the recession, but they’re doing it “comfortably”.

Ovum’s report tracked the performance of mobile operators across all regions in the world for 2008, and, overall, the research firm says operators maintained revenue and customer growth during the period, although the rate of growth was down.
Emeka Obiodu, senior analyst at Ovum, says that, while most operators in emerging markets are yet to see any significant pressures on their performance, operators in countries such as the US and across Europe, where the recession has had dramatic impact, “operators’ revenues are holding out.”

“Indeed, it is not about immunity from the recession per se, but rather, adaptability to the downturn,” reports Obiodu.

Obiodu says it is comforting that mobile operators have shown what he calls “remarkable resilience”, further commenting that, whereas other industries have gone to the government with their begging bowls, mobile operators are actually “pledging to invest billions to roll out a new high speed mobile network. In fact, after scouring the world, we are yet to find any mobile operator that is calamitously struggling solely because of the recession.”

According to Ovum, the threat to the number of revenue generating customers has yet to materialise as operators are generally still growing and adding customers, and, he says, while the fear that existing customers will reduce their spending is valid, mobile operators have taken steps to avoid or ameliorate drastic impact.

However, Obiodu warns that the biggest threat to mobile operators is that currency fluctuations reduce the value of the revenue they get, with lower values meaning it is difficult to maintain repayment on dollar or euro denominated debts and to fund new network investment.

The report further warns that, going forward, mobile operators have to get back to worrying about competition and regulation, as “these are the main challenges facing them.

“It is no use bickering about the recession when rivals are positioning themselves to outsmart you,” cautions Obiodu, adding that “neither is it savvy to fret about the fall in roaming revenues from business travellers when the EU can force roaming prices down easily.” says Obiodu.

“On many occasions where an operator has complained about the recession, it is possible to show a corresponding non-recessionary force at play,” says Obiodu, but he warns that the recession will force a change in future direction for operators.

“While the short term impact is limited, the recession will ultimately engineer a paradigm shift in strategic thinking across the industry. On the ground, the basics of the industry will surely remain the same, but the approach to service delivery will eventually change.”

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